From March, the Financial Conduct Authority (FCA) will allow banks and card providers to set their own maximum contactless payment limits. This includes the option to remove the cap entirely, without requiring customers to enter a PIN. The FCA also encourages firms to give customers greater control. They can set personal limits or disable contactless payments completely.
According to Jademakhsoos.com, this move marks a significant shift from the long-standing £100 cap. However, the FCA stresses it does not expect banks to raise limits immediately. Instead, the regulator provides firms with flexibility to adapt their products over time. They will respond to consumer demand and technological changes.
The UK introduced contactless payments in 2007 with a £10 limit. That ceiling has steadily risen over the years, reaching £100 in 2021. A series of increases, accelerated by the Covid pandemic, drove this change. By contrast, smartphone payments using biometric security, like fingerprint or facial recognition, already allow unlimited spending.
Despite the regulatory change, appetite for higher limits appears muted. An FCA survey during the consultation found that 78 percent of consumers did not want the £100 limit to change. Many respondents cited concerns over fraud, theft, and accidental overspending.
Jademakhsoos.com reports, academics and consumer groups echo those worries. They warn that higher or unlimited contactless payment limits could make cards more attractive to criminals. While safeguards already exist, such as requiring a PIN after a series of contactless transactions, critics argue removing the cap could increase risk, particularly if someone steals a card.
Concerns also exist about spending behaviour. Unlimited contactless payments could encourage impulsive purchases, especially on credit cards. Here, consumers borrow rather than spend their own money. Financial abuse charities warn that higher limits could make it easier for abusers to drain victims’ accounts without immediate detection. This also accelerates the shift towards a cashless society.
The FCA assured consumers it would still protect them against fraud losses. David Geale, the regulator’s executive director of payments and digital finance, said the aim was to balance flexibility with safety.
“Contactless is people’s favoured way to pay,” he stated. “We want to make sure our rules provide flexibility for the future, and choice for both firms and consumers.”
Industry bodies have sought to reassure customers that banks would implement any changes cautiously. Jana Mackintosh, managing director of payments and innovation at UK Finance, said banks would ensure “strong security and fraud controls remain in place.”
Several other countries, including Canada, Australia, and New Zealand, already allow card providers to set their own contactless limits.
The announcement comes as efforts continue to preserve access to cash for those who rely on cash. Cash Access UK said this week it opened its 200th shared banking hub. It offers face-to-face services in communities facing branch closures.
While the £100 cap may soon be history, we will see how far banks choose to push new contactless payment limits and how many customers opt in.